FCCPC to telcos: Don’t provide service to digital lenders under investigation

The Federal Competition and Consumer Protection Commission (FCCPC) has directed telecommunication companies to desist from providing connectivity services to digital lenders that are under investigation.

Babatunde Irukera, chief executive officer, FCCPC, said this in a statement on Thursday during an enforcement exercise in Lagos.

FCCPC said it has ordered payment service firms to stop providing transaction services to such lenders under the commissions’ radar or those not adjudged to be unlicensed.

“The commission has ordered all operating payment systems, including Flutterwave, OPay, Paystack and Monify, to immediately cease and desist providing payment or transaction services to lenders under investigation or not otherwise operating with applicable regulatory approvals,” Irukera said.

“The commission has also ordered telecommunication/ technology companies (including mobile network operators (MNOs)) to cease and desist providing server/hosting, or other key services such as connectivity to disclosed or known lenders who are targets/subjects of investigation or otherwise operating without regulatory approval.”

FCCPC SEALS SOKO LENDING LIMITED

In the early hours of Thursday, the commission clamped down on the operations of Soko Lending — a digital lender — located in a residential area within Ikeja environs.

The enforcement operations, which lasted for about two hours, saw FCCPC evicting workers from the company’s facility and sealing off the premises.

According to the commission, Soko Lending “appears to be the most consequential digital money lender with multiple apps and brand names covering a significant share of the digital/online lending market, and one of the most prolific actors in violating consumer privacy, fair lending terms and ethical loan repayment/recovery practices”.

“The evidence we have discovered here suggests that [this] will also be a Soko lending company. And we’ve discovered that there is another app that we previously didn’t know [and] we’ve just communicated that to Google. We expect that app to be taken down before the end of the day,” Irukera added.

“Prior to this operation, the commission had previously, on March 11, 2022, carried out a similar enforcement action with respect to multiple lenders; which action and continuing investigation has reduced previously high and escalating unethical, obnoxious and unscrupulously exploitative practices in the industry.

“However, some of the lenders who have been subjected to the investigation have devised methods to leverage technology and other financial services alternatives to circumvent account freezing and app suspension orders.

“With the operations today, the commission expects an appreciable additional reduction in these unacceptable practices.”

Irukera added that SoftPay was one of the apps discovered and reported to Google during the enforcement activity.

Digital lenders, otherwise known as “loan sharks” offer loans at extremely high rate returns, strict terms of collection and generally operate outside the law.

In January, Godwin Emefiele, CBN governor, urged Nigerians to avoid loan sharks and leverage on microfinance banks.